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Passive Currency Hedging

Objective

Passive currency hedging aims to reduce or eliminate currency risk arising from exposure to international assets.

Our approach

  • Advise on hedging policies that address client risk appetite and portfolio structure.
  • Set up efficient operational workflows using proprietary systems.
  • Provide transparent and efficient execution through a panel of approved counterparties.
  • Manage cash flows and oversee collateral requirements.
  • Avoid cash drag, including by using equitisation strategies
Passive Currency Hedging Graph

Currency risk within international portfolios*

Benefits

  • Currency exposures are monitored and managed.
  • Operational efficiency is achieved through optimising the execution process and managing settlement and reconciliation with custodian banks and/or prime brokers.
  • The volatility of returns in portfolios exposed to international assets is reduced.
  • Best execution is achieved through access to a curated panel of counterparties.

See more articles: https://www.millenniumglobal.com/studies/passive-currency-hedging

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